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When I was a fresh grad­u­ate, I nev­er thought about how to invest my mon­ey. I am a good saver but nev­er an investor.

Things have changed when I became buried in debt when I was 23. A friend who was a finan­cial advi­sor talked and offered me an invest­ment in which I almost put all of my sav­ings on that instru­ment. Lat­er on, I regret­ted my deci­sion because that invest­ment was­n’t fit with my goals and aspi­ra­tions.

Though it helped me a lot to open my eyes to the pos­si­bil­i­ty that there are more invest­ment instru­ments out there, but which one should I choose?

What is Investing?


But before that, what is invest­ing?

For some peo­ple, they thought that invest­ing is a gam­ble, but says, invest­ing is the act of com­mit­ting mon­ey or cap­i­tal to an endeav­or (a busi­ness project, real estate, etc.), expect­ing of get­ting an addi­tion­al income or prof­it.

Peo­ple who invest their mon­ey have two pri­ma­ry rea­sons; to grow their mon­ey and to have an addi­tion­al income.

To grow your mon­ey, you have to make it work hard for you and putting your mon­ey into a sav­ings account could­n’t do that because our tax­es are increas­ing thus instead it will grow over time, its val­ue will decrease.

Before you invest, con­sid­er the tips below:


Before You Invest


Before you invest, you should set a goal first and com­mit to achiev­ing it. If you haven’t set your goals, please read this first.

And also, do not invest in some­thing you do not know.

Then, you should save by now. 3 to 6 months worth of your salary will go into your sav­ings account. Nev­er put all your mon­ey into an invest­ment. If you don’t know how to save yet, this is how to save mon­ey.

Why do you need to have sav­ings first before invest­ing? Because invest­ing has a lot of risks. You will either lose your mon­ey or grow it. In such an event you will lose it because of sev­er­al fac­tors; you don’t have to wor­ry about it and pulled it out like most peo­ple do.

Now, giv­en that you have sav­ings for emer­gency and have a goal already, then you need to deter­mine what kind of investor you should be.

SEE ALSO:  3 Truths About Money


What Kind of Investor are You?


There are four kinds of investors; the con­ser­v­a­tive, the bal­anced, the mod­er­ate, and the aggres­sive one. Which one are you? Here is a sim­ple test:

Once you have the result, you can now invest depend­ing on the risk you can han­dle and the goal you have for your finances. Now, where to invest and how to invest my mon­ey?


Where to Invest?


There are dif­fer­ent invest­ment instru­ments where you can put your mon­ey to make it work hard for you.

1. Invest­ment-linked Insur­ance.

Some peo­ple called it as VUL (Vari­able Uni­ver­sal Life). It is also as an invest­ment but known as an insur­ance pol­i­cy. It has the com­po­nent of sav­ings, invest­ment, and life insur­ance. Most finan­cial advi­sors offered this prod­uct as an invest­ment.

There are also pros and cons for this one and will invite a friend to write it on the next blog.

2. Mutu­al Funds. 

Mutu­al funds are a great way to grow your mon­ey as you don’t have to study or pick a com­pa­ny where you should put your mon­ey. It can also be a com­bi­na­tion of stocks, bonds, and mon­ey mar­ket.

It is a pool of mon­ey col­lect­ed from investors for the pur­pose of invest­ing it into dif­fer­ent instru­ments like bonds, secu­ri­ties, mon­ey mar­kets, and stocks.

And then there is a fund man­ag­er who will man­age the fund and do the work for you.


3. Bond/s.

A bond is a form of a fixed-income invest­ment where­in your mon­ey will fund an enti­ty or a com­pa­ny project or gov­ern­ment for a def­i­nite peri­od with an inter­est rate.

For exam­ple, a gov­ern­ment has a project and they need to tap investors for fund­ing. As an investor, I will lend my mon­ey to the gov­ern­ment and put an inter­est rate on it. The inter­est will return togeth­er with the cap­i­tal after a peri­od.

I have this kind of invest­ment already where­in I will expect my mon­ey to return with the inter­est rate after 10 years. So far this is a low-risk invest­ment but also low returns.


4. Stocks.

A stock is a secu­ri­ty that sig­ni­fies own­er­ship in a cor­po­ra­tion and rep­re­sents a claim on part of the cor­po­ra­tion’s assets and earn­ings.

A stock will earn you the right to become a share­hold­er of the com­pa­ny, thus you also earn a frac­tion of the com­pa­ny earn­ings.

SEE ALSO:  What The Richest Man In Babylon Taught Me About Luck

For me, invest­ing in the stock mar­ket is a great way to make your mon­ey work hard for you. The stock mar­ket is a place where­in investors can buy stocks/shares of a com­pa­ny. Once you become an investor in a com­pa­ny, the way you think about the com­pa­ny will nev­er be the same.

And last­ly, I know you heard about it already:


5. Cryp­tocur­ren­cies.

If you have heard about Bit­coin, Ethereum, Rip­ple and oth­er alt­coins, you may won­der where it came from? Watch this video first:

Cryp­tocur­ren­cy works like a dig­i­tal cur­ren­cy and unlike any oth­er invest­ment, Cryp­tocur­ren­cy can only be acces­si­ble on the inter­net. It works as a medi­um of exchange with a pur­pose of decen­tral­iz­ing mon­ey so the banks can­not even man­age it.

Most econ­o­mist and investors are against it. There were no guar­an­teed returns in this kind of instru­ment. You can­not invest in this one for the long-term for now.

As an investor, I am not against with this instru­ment. To be hon­est, I am also invest­ing in this, not by buy­ing the coins using my cash but invest­ing in machines that can mine a coin. But that’s enough for now, I will write a sep­a­rate arti­cle how to do it at least on my own expe­ri­ence.

Now, how to put your mon­ey in this invest­ment? That will be a long lec­ture and I promise to write how to invest on that instru­ments one by one on my next arti­cle.

Dis­claimer: If you own the pho­tos, please leave a mes­sage and will cred­it it to you. 

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I blog about my dis­cov­er­ies and learn­ings with per­son­al devel­op­ment, blog­ging, writ­ing, pub­lic speak­ing, and pub­lish­ing. I am a Jesus fol­low­er. Each month, I send out a newslet­ter with free tips on those top­ics.

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